More than a third of local homes have lost value, report says

The Chicago housing market is recovering from a brutal crash, but more than a third of local homes are worth less than they were a year ago, according to a new report.

Real estate website Zillow found that 35.8 percent of Chicago-area homes lost value in the 12 months through the end of August. Nationally, 27.9 percent of homes dropped in value over the same period.

“We're not going in reverse, but we are hitting the brakes a bit in some markets,” Zillow Chief Economist Svenja Gudell said in a statement. “It's easy to say the recession is over when a third of the biggest markets are more expensive now than ever before, but we're still seeing a number of homes losing value. The reality is there are still areas lagging behind in the recovery.”

A Zillow index of Chicago-area home prices rose 2.5 percent in the 12 months through August, but some parts of the area went backward while others went forward. Chicago's Rosemoor neighborhood had the highest percentage of homes with declining values, 80.7 percent, followed by Englewood, at 76.8 percent.

Among other U.S. cities, Baltimore had the biggest percentage of homes that fell in value, 48.1 percent, followed by Philadelphia, at 43.4 percent, and Washington, 41.2 percent. At the other end of the list, Denver had the smallest percentage, 1.5 percent, followed by Dallas, 4 percent, and San Francisco, 5.2 percent.